Profitable Growth Strategy. Thomas Michael Hogg

on defining and executing on key clients, priorities, people, projects, and tasks bringing you 16x more results. Specific secrets about the quality from German companies is explained in Chapter 2. The target market definition serving a specific segment building a loyal “tribe” is detailed in Chapter 3. Chapter 4 addresses the importance on R&D launching functional products. Chapter 5 gives advice to penetrate international markets with your products and/or services. How to enter the profitable growth zone is covered in detail in Chapter 6. A well-developed plan, a common German habit, will conclude the process to create a more holistic and financially successful business model (Chapter 7).

      What are the benefits of reading this business masterclass book and putting into practice the 7-step Profitable Growth competencies?

      • You will develop critical skills for strategic planning

      • You will gain profound understanding of sales and profit drivers

      • Receiving clarity for decision making regarding your 2-years growth plan

      • Acquisition of new strategy roadmap and execution practices, also to withstand crisis situations

      • Gaining insights on how to reach the highest potential of your company or strategic business unit with a sound business mindset

      • Reducing stress and uncertainty concerning daily performance pressure

      • Improving your ability to achieve financial results

      The “TMH Profitable Growth Strategy” book covers elementary tactical and strategic planning, sales & marketing, finance, and management concepts from a completely new and holistic perspective. With this knowledge, you will be able to plan to grow your company above the industry profitability level.

      For the past 20 years, my consultant colleagues and I have observed what is working out and what is not. Addressing the Profitable Growth dilemma and delivering business results is our passion, as we know the CEOs are often very lonely and desperate to find the right track to success.

      This book is based on what is happening in the real business world and about the challenges company leaders face on a daily basis. A practical approach to bring a company to the next level was the motivator to write this book. This is why, we document the knowledge gained to guide your profitable growth path.

      The goal: Entering the profitable growth zone.

      Enjoy reading about profitable growth solutions.

      PART I

      8020 Focus and

      No distraction

       1 – 8020 Focus and No distraction

      Doing a successful and result-oriented job is not as easy as it seems. In 1999, I was stunned by the productivity level and focus of my work colleague at a bank in the South of Germany. Mrs. Muller, a trusted and long-time employee in that bank, was scanning and double checking all high-income transfer receipts. I noticed two aspects at the same time, there were many zeros on each receipt and there were only a few receipts scanned compared to the amount of numerous boxes of thousands of documents. I was confronted the first time with the 8020 concept. All of the high and important transfers were taken into account whereas the majority of transfers weren't included by Mrs. Muller. She only focused on the most important transfers. But as a matter of fact the real lessons learned from her was her focus on time and to deliver her tasks each day in 8 hours because she had a 40 hours week. Every day she performed and there was zero distraction to do what she had to do on her 8 hour-workday. She was delivering concentrated value by simply doing what she was supposed to do.

      Sounds like a normal working performance. But, there is one common mistake I see day by day in the numerous offices I visit.

      Employees are very often “just not” doing what they are supposed to do.

      And even worse, their boss, the CEO, is very often neither doing what he/she is supposed to be doing.

      They are trapped in the daily business and the incoming operative problems, mails, social media and non-strategic tasks. They are busier with efficiency than with effectiveness. Doing the right things versus doing things right.

       CEO challenge

      The key challenge for a CEO is to manage that he/she and importantly his/her team are focusing and executing on the right things each day. And that doing the right things impact financially on profitable growth. CEOs have to define where the company will be in 2 years and not take part in each single decision which his or her managers are responsible for.

      CEOs have to define the long-term vision and the fundamental business model elements (for instance closing constant deals with their key account, developing and hiring an outstanding sales team, defining a required service level or establishing a best in class business practice or process) that provide the company a competitive advantage and generate financial value.

      CEOs are responsible for the strategy.

      Strategy is a synonym for renunciation. To focus, CEOs have to trade off.

       How much time do you spent each day on operational issues?

       How much of your time are you in the 8020 zone?

      In 1906, Vilfredo Pareto noted that 20% of the population in Italy owned 80% of the property. He proposed that this ratio could be found continuously in the physical world and theorized it might indicate a natural law. For business, we know that in most cases the 8020 rule comes true:

      o 80% of work is completed by 20% of your team.

      o 20% of your best clients (or customer segment) makes 80% of your sales.

      o 20% of your products makes 80% of your sales.

      o 20% of your best sales reps makes 80% of your sales.

      o 80% of your complaints come from 20% of your customers.

      o 80% of value is achieved with the first 20% of effort.

      o 80% of project politics come from 20% of your stakeholders.

      o 80% of problems originate with 20% of projects.

      o 80% of software problems are caused by 20% of bugs.

      o 80% of customers only use 20% of software features.

       16x Pareto Principle

       80÷20=4

       20÷80=0.25

       4÷0.25=16 → 16x

      The right focus with the Pareto principle to define and execute on key projects, clients, priorities, people, tasks, … brings you 16x more results = impact = success

      I always include the 8020 principle in all strategy courses I give, as a key part to plan a successful year in order to deliver more customer + employee value and to receive more profitable growth for the company.

      Through the years, I have seen that many CEOs, especially of SMEs, lack to see the BIG PICTURE; whereas the most successful CEOs have become 8020 masters because they lead their companies to achieve ambitious goals while focusing energetically on the most important actions to reach the higher goals, for instance:

      - They visit and develop the relationship of their key clients and prospects to understand market needs and requirements.

      - They talk frequently to and retain their key employees, especially key sales people.

      - They are aware of disruptive trends and key challenges. Hereby, they are better prepared for an unpredictable crisis.